Thursday, October 20, 2011
Why is Prof. Krugman not a macroeconomist? How could he do analysis as good as actual top macroeconomists?
I'm still not sure I understand why Prof. Krugman isn't considered a macroeconomist, in my understanding his expertise is in international trade, why exactly is that not macroeconomic? What constitutes his endless popular writing on macroeconomic topics -is it an exercise in procrastination? How could he see deeper about macroeconomics if similar talent spends all their time cultivating macroeconomic expertise and he's got a busy day job cultivating international trade expertise?
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Krugman's writings on Japan definitely count as macro, but that's not really what he's known for. I think he writes a lot about macro because people are interested in it, particularly in the current context. I think when he wrote for Slate he more often discussed micro.
ReplyDeleteTrade can be across nations, but it doesn't really have to be. Comparative advantage is often explained with one individual hiring another. My recollection is that the "new geography" literature he won his Nobel for dealt with geographic agglomeration that was often at the city level. Apply some abstraction and the same logic about economies of scale can be used to explain a clustering of actors/resources into firms rather than individuals interacting via a market. Apply a rule of thumb that macro needs money and micro doesn't, and his trade theory is slotted as micro while the babysitting co-op is macro.
I usually hear from economists that Krugman hasn't been an active participant in academic research for some time (though I think he recently published a paper with Gauti Eggertsson). For example the interview with Sargent where he mentions the weekly Princeton macro seminar which Krugman didn't attend.